News Article

Navigating changes to WorkCover Scheme and what small businesses need to know

04 June 2024

When it comes to your small business, staying informed about regulatory changes is crucial. The recent passing of the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023, brings significant changes to the WorkCover scheme, aimed at managing costs and ensuring sustainability.

For small businesses, understanding these changes is critical to safeguarding operations and employees.

Reduced mental injury coverage 

One of the most important adjustments involves the exclusion of certain mental injury claims from WorkCover compensation. This shift raises the threshold for what qualifies as a ‘mental injury,’ impacting employees' access to compensation.

Naveen Raghavan, Work Place Relations Advisor at Business Solutions Hub, says, "A key aspect of the new legislation is the redefinition of 'mental injury,' which now requires significant behavioural, cognitive, or psychological dysfunction diagnosed by a medical practitioner according to specific criteria."

This change makes it harder for employees to qualify for compensation for mental injuries, while small businesses need to focus more on mental health at work and take proactive steps to reduce risks.

What's covered? 

The amendments also exclude stress and burnout claims from weekly compensation, except in cases where the triggering event is deemed beyond typical work-related stressors.

Naveen says, "While stress and burnout arising from usual work demands may not be covered, those stemming from extraordinary events, such as witnessing a traumatic workplace incident, may still qualify for compensation.

“For small business, this highlights the importance of identifying and addressing workplace stressors to minimise potential risks.”

Action steps for small businesses

In light of these changes, small business owners are urged to take proactive measures which includes reviewing WorkCover policies by evaluating existing policies or seek legal advice to understand the implications of the new legislation on your business.

Secondly, addressing employee concerns and investigate past mental health claims to identify potential risk mitigation strategies and foster a healthier work environment.

Seek professional guidance 

According to Naveen, seeking professional assistance is important in getting the support small businesses need for clarity. 

“As small businesses navigate WorkCover schemes changes, staying informed and proactive is paramount. By understanding the smaller details of these amendments and taking appropriate measures, small businesses can protect both their interests and the wellbeing of their employees.

For further assistance, reach out to the Workplace Relations Team at NECA Vic via [email protected] or call us on 1300 300 031.

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